Please read: SCU will continue to monitor changes made to federal student loans as a result of the One Big Beautiful Bill Act. While the information below summarizes common questions students and parents may have, it is important you also conduct research should you require additional details not included on this page.

What You Need to Know

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, resulting in changes to federal student aid programs. Some of these changes went into effect immediately, while others will go into effect in 2026 and beyond.

Students and parents should review the information below if you plan to borrow federal loans for the 2026-2027 academic year:

Plan to enroll in a Graduate or Professional Program for the 2026-2027 academic year.
Are continuing a Graduate or Professional program AND borrowed federal loans before July 1, 2026.
Plan to change academic programs AND/OR transfer institutions.
Expect to utilize the Grad Plus Loan program to cover any necessary costs associated with your program.

What is changing?

Starting July 1, 2026, the decision was made to eliminate the Graduate PLUS loan for new Graduate and Professional student borrowers. New federal law also updated the annual and lifetime limits on Unsubsidized Direct Loans. Additional changes include a new annual and aggregate Parent PLUS loan limit for NEW Parent PLUS borrowers, as well as future loan proration parameters that still being discussed.

Some returning students may still qualify under a limited legacy provision if specific requirements are met.

How do I Know If the Changes Affect Me?

Below are some (not all) of the most common questions students and parents may be asking themselves to determine whether or not the new federal laws apply to their situation:

Student Borrower Scenarios

New Undergraduate student borrower: all loans will be disbursed on or after July 1, 2026

Your annual and aggregate loan limits remain unchanged, however, can still be adjusted if your status drops below full-time. Starting July 1, 2026, parent Direct PLUS Loans face new restrictions, including a $20,000 annual and $65,000 aggregate limit for dependent undergraduates. Even if your parent is denied a Direct PLUS loan due to adverse credit history, reaching the new parent loan maximum limit does not grant you access to additional funds. Review the Federal Student Aid site for more information regarding annual loan limits.

New Graduate Student Borrower: all loans will be disbursed on or after July 1, 2026

Effective July 1, 2026, graduate and professional students face separate loan limits, including the elimination of Direct PLUS Loans and a $257,500 lifetime borrowing cap. Graduate students are limited to an annual unsubsidized loan limit of $20,500 with a reduced aggregate limit of $100,000 (excluding undergraduate debt). Eligibility may be further restricted if you are enrolled less than full-time.

Student Borrower: all loans were disbursed before July 1, 2026, and I do not plan to receive new loans on or after July 1, 2026

Your loan limits remain unchanged since you do not intend to borrow more funds. However, if you decide to seek additional aid or consolidate your loans, you must review the specific guidelines for receiving new loans on or after July 1, 2026.

Repayment

Because all of your loans are first disbursed before July 1, 2026, you’ll retain access to many of the existing fixed payment repayment plans and income-driven repayment plans.

Undergraduate Student Borrower: loans disbursed before July 1, 2026, and I do plan to receive new loans on or after July 1, 2026

Most borrowers must follow the new loan limits starting July 1, 2026, though those who qualify for a special exception can delay certain changes—including the $257,500 lifetime cap and stricter parent PLUS limits—until the 2029–30 award year. Maintaining this exception allows parents to continue borrowing up to the full cost of attendance, whereas non-exempt parents face a new $20,000 annual and $65,000 aggregate cap. To indicate if you might qualify for this special exemption, review this resource: Federal Student Aid Changes from the One Big Beautiful Bill Act

Graduate Student Borrower: loans disbursed before July 1, 2026, and I do plan to receive new loans on or after July 1, 2026

Starting July 1, 2026, graduate and professional students will face distinct loan limits and the elimination of Direct PLUS Loans, though those who received a loan before that date may qualify for a "legacy exception" to maintain existing limits through the 2028–29 award year. Under the new rules, graduate students are capped at $20,500 annually with regards to federal unsubsidized loans and $100,000 in total, while professional students can borrow up to $50,000 per year with a $200,000 aggregate limit. To indicate if you might qualify for this special exemption, review this resource: Federal Student Aid Changes from the One Big Beautiful Bill Act

Parent PLUS Loan Borrower Scenarios

Parent PLUS Loan Borrower: of my Direct PLUS Loans for parents are first disbursed before July 1, 2026, and I don’t plan to receive new parent PLUS loans on or after July 1, 2026.

Because all of your loans are first disbursed before July 1, 2026, you’ll retain access to many of the existing fixed payment repayment plans, as well as the Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) Plans (if you take additional steps). If you have any type of Direct Loan—including a Direct Consolidation Loan—that is first disbursed on or after July 1, 2026, then your access will be limited to only the Tiered Standard Plan. Learn about receiving a Direct PLUS Loan for parents after July 1, 2026.

Parent PLUS Borrower: and all of my loans are first disbursed before July 1, 2026, and I do plan to receive new loans on or after July 1, 2026.

Starting July 1, 2026, most parents will face new borrowing caps of $20,000 annually and $65,000 in total per dependent student. However, those who qualify for a limited exception can delay these caps until the 2029–30 award year, allowing them to continue borrowing up to the full cost of attendance minus other aid. This exception remains valid unless the child takes specific actions to cancel it, at which point the stricter limits apply immediately. To indicate if you might qualify for this special exemption, review this resource: Federal Student Aid Changes from the One Big Beautiful Bill Act

Loan Limit Exceptions

If you meet certain requirements, you’ll have a period of time after July 1, 2026, and before the new limits apply during which you might be eligible for a Direct Loan under the pre-OBBBA limits.

If you qualify for the exception, you’ll be exempt from certain loan limits and loan eligibility changes for the lesser of:

three academic years or
the difference between the published length of the program of study you (or the child you’re borrowing for) are enrolled in and the period of time you (or your child) have completed in that program.

Undergraduate Students and Parent PLUS Borrowers

You qualify as an eligible undergraduate student under the limited exception to allow your parent to receive a Direct PLUS Loan for parents if you:

were enrolled in a program of study at an institution as of June 30, 2026;
received at least one Direct Loan, or your parent received a Direct PLUS Loan on your behalf, for such a program of study, before July 1, 2026; and
are enrolled at the same institution and are seeking the same credential after July 1, 2026, and have not ceased to be enrolled seeking the same credential at the same institution at any point on or after July 1, 2026. An approved leave of absence is not considered to be a break in enrollment.

“Credential” refers to the degree you’re seeking, for example, a bachelor’s or associate degree. You can’t change credential level and maintain eligibility for the exception, but you can change majors within your credential.

Graduate and Professional Students:

You qualify as an eligible graduate or professional student under the limited exception only if you:

were enrolled in a program of study at an institution as of June 30, 2026;
received at least one Direct Loan for such program of study prior to July 1, 2026; and
are currently enrolled at the same institution in the same program of study and have not ceased to be enrolled in the same program at the same institution at any point on or after July 1, 2026. An approved leave of absence is not considered to be a break in enrollment.

Additional Resources

We do ask students and parents review the Federal Student Aid (FSA) resources mentioned below to review additional details not mentioned on this page. You may also contact FSA support or SCU's One Stop Office (onestop@scu.edu) with additional questions.

Federal Loan Changes (Effective July 1, 2026)